Perth property prices surge as Kwinana, Mandurah, Belmont, Victoria Park lead the way
By Evelyn Manfield, ABC News
Jessica Hawes and her fiance Callan Bennett sold their Parmelia property in Perth's south last week for $115,000 above what they paid for it in September 2019, thanks to a huge house price boom in the area and across the country.
The City of Kwinana, which includes Parmelia, recorded the biggest increase in property value in Perth in the last 12 months, up by nearly 11 per cent, according to CoreLogic.
The couple bought their four-bedroom, two-bathroom home for just over $300,000 and quickly started renovations worth around $50,000, including spending $20,000 on the kitchen.
"We're still in disbelief about how much we actually sold our house for because it's insane," Ms Hawes said.
"I think we're walking away with about a $52,000 profit, which is huge."
The pair were not planning to sell, but the booming property market was too tempting especially because it was not their "forever home".
Ms Hawes said she was not nervous about selling because of how well the market had been doing, but did not expect the first and only offer would come through before the home was even listed online.
Fear of missing out motivates buyers
Coulson & Co Real Estate, which sold the couple's home, primarily services the Kwinana and Rockingham areas and has recorded a huge increase in business in the last year.
Owner Michael Coulson said around 18 months ago, his agency was selling about five properties per month, but that had now more than doubled to 10 to 14.
He said the attitude of buyers had also shifted dramatically.
"What we're noticing is the change in mentality, [it] has gone from 'what's the least the sellers will take?' to 'how much do we have to pay to get this property?'" he said.
"I think there's a lot of fear of missing out now, certainly from the buyer side."
Mr Coulson said that was clear as more and more often properties were being sold to buyers on their database before they were published online.
The increase in value was leading to a discrepancy between property valuers and agents, he said, because agents were working to the current market whereas valuers dealt with historical evidence.
"The value is going off of results from two to three months ago, which are properties that may have sold four to five months ago," he said, noting buyers were prepared to pay much more.
Buyer urgency drives market
Several other real estate agents shared similar experiences, with urgency among buyers being a major factor.
Real estate sales coordinator at The Agency, Marcia Burke, said properties were being sold almost as soon as they were listed and prices were "way over" what was expected.
She said one of her most successful properties, which had undergone minor renovations, attracted 15 buyers and recently sold for $850,000, after being purchased just four years earlier for $700,000.
Ms Burke said since the five-day shutdown in the Perth, Peel and South-West regions, properties were selling even quicker, with some interstate buyers purchasing blind.
Her patch largely focussed on Duncraig in Perth's north, and she said on average, houses were selling for $30,000-50,000 more than what they previously would have.
She said in 2014 when the market was "crazy", they would receive multiple offers, something that drove prices up — and the same was happening now.
Kwinana, Mandurah, Belmont top price increases
Property values in Kwinana rose by 10.8 per cent in 12 months, while Mandurah, Belmont and Victoria Park all recorded a growth rate above 8 per cent, CoreLogic's head of research Tim Lawless said.
Mr Lawless said typically "affordable" areas were seeing the biggest increase in house prices across WA as the state's housing market clocked its biggest growth rate since the mining boom in mid-2014.
Fifth on the list was one of Perth's most expensive suburbs, Cottesloe, where house values rose by 7.3 per cent in the last year.
But Mr Lawless said housing affordability in Perth was still quite healthy in comparison to other capital cities.
"We're still seeing housing values in Perth about 17 per cent lower than when they peaked back in the middle of 2014," he said.
"Even though we're seeing values rising quite quickly now, in dollar-value terms, we're seeing homes roughly at the same level value-wise is what they were in late 2006, early 2007."
Despite sizeable growth in value in Kwinana, he said property prices were still around 20 per cent below what they were during the 2014 peak.
"But if we do see housing values continuing along this rapid growth trend, then no doubt, we will start to see some affordability challenges," Mr Lawless said.
The data from CoreLogic was part of a nationwide analysis which revealed Australian house prices had posted their sharpest monthly increase since August 2003, with every capital city posting an increase as well as some regional markets.
The report also found an extreme disparity in rental markets across the country, with rental conditions very tight in both Perth and Darwin.
It found rental growth for houses and units was above 10 per cent.
Meanwhile, WA's peak real estate body reported sale listings in Perth stooped to a 10-year low in February, with less than 8,000 properties listed on their website.
It was the seventh month in a row sale listings declined in Perth, according to REIWA.
Its data also showed the median sale price in Perth in February stood at $490,000.
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Written by Nikki Horner, Elite Agent Magazine While the downturn in the market in the eastern states is still relatively fresh, agents in the west have been battling tough conditions for some time now. Nikki Horner sat down with Michael Coulson, director at Coulson & Co in Perth’s southern suburbs, where the average time on market hovers around 80 days, to see what critical processes are needed to not only survive but conquer his core area. When prospective clients ask how the market is going, how do you respond? Brutal honesty. I’ll tell them it is a tougher market than we’ve seen in a good 10 years or so, so that they’re not under any illusions or false expectations. We want to let them know that it’s not a great time to sell unless you’ve got a good reason to and I get them on the right platform straight away. We educate them and let them know that it is a tricky time to sell, but the properties are selling if they’re priced correctly and presented well. What are you seeing as the primary motivation for people selling? Unfortunately, there have been some distress sales and, again, that’s where you have got to be really honest. Some of the sellers we are taking on have been on the market with another agent for three or six months and were given unrealistic expectations. We’ve seen the market drop in that time, so if they were put on the right track straight away, they could have sold already and be out of their situation. Then some sellers are recognising that it’s not a great market to sell in, but they’re taking that opportunity to buy and upgrade. They’re typically more realistic, as they’re researching the market they want to buy in. Are you using expired listings as a source of lead generation? I’ve never been a big fan of it. However, I have always said if the person you’re contacting doesn’t have a good relationship with their agent or isn’t being communicated with frequently, then there’s an opportunity there. I advise my team to do it subtly, rather than banging down the door or sending the ‘I’ve noticed you’ve been on the market for 90 days’ letter. I recommend by day 60 that’s when we can drop in just listed, under offer and just sold information, making sure they hit that letterbox frequently. So more like brand recognition? Exactly. Rather than directly target the expired, we focus on the street, so that if they do talk to the neighbours it’s more of a ‘did you get this as well?’ conversation. If the relationship with their current agent isn’t great and they’re looking for a change you’re going to be on the shopping list. How do you manage carrying extra stock? Trying to keep your stock numbers down allows you to give a better level of service and it’ll also help you get your sellers aligned to get to where they need to be. If you’re running with big numbers, you can’t communicate with your clients enough to educate them as to where they need to be to get their properties moved. What methods of sale are working? We will start almost every property as a closing date, similar to an auction. In my previous company, I was very traditional: put it on the market, put a price on and if that doesn’t work then you drop the price until something happens. I prefer closing the date sale, purely because it gives you that window of time where you can create competition. How are you quoting price in those campaigns? We’ve been finding that if a property isn’t a real standout, if you haven’t got a price on it, you just won’t get the enquiries or the inspections. We’ve now started putting price guides into the marketing. That’s been quite successful. We are constantly experimenting with what we can do differently, to keep changing until it hits the right spot with the market place and the buyers. How many buyers would you expect to see during a campaign and how are you stimulating buyer interest? I’d say you’re probably looking at 10 to 16 buyers across a 60-day period. We are pushing properties through social media. Even if it just generates someone that’s a passive buyer, you can appreciate that if you’re expecting zero, one or two groups through an average home open, you can get one extra person there, it creates an extra sense of competition. How are your team working with buyers? We will show them everything we have that may be slightly suitable. Buyers are gold now. Once you’ve got a buyer that you know is ready, they’ll be on a hot list and we’ll be contacting them until we’ve found them a property. Almost pushing until you’ve got a listing that suits rather than the other way around. We are maintaining contact with them weekly and sending them automatic alerts as we list anything in their price range. Our CMS has buyer match capability. How often are you meeting with vendors and what conversations are you having? The main thing is consistent communication once or twice a week. Having a good conversation with them on how the property’s positioned, what they’re now competing with and keeping them up-to-date on the market. We let them know what sold in their area and what we have sold in their area. The danger is, your sellers can start to lose a bit of faith if they’re on the market and you’re not letting them know what’s going on. If you’re not then there’s a good chance your competition will be. You’ve got a property that’s starting to get stale, it’s pushing 60, 90 days on market, how are you realigning vendors on price and helping them move on? It’s making that decision as to whether they are going to sell. It’s talking to them about what’s similar that has sold or what’s better that has sold and how much it sold for, so that they can understand where their property is positioned. Finding out what they’re prepared to sell for so you can make sure that your actual pricing strategy is correct. One of the things that we quite consistently find is our sellers will be adamant that they need a certain figure and the property will be priced to reflect that. We also explain to them that by pricing it aggressively you get more competition. How are you handling low offers and re-aligning sellers? Even in a buyer’s market, we’re still finding that if a buyer likes the property and the property suits them, if it ticks the right boxes, they will move for the property. It is still a case of 100 per cent working to the sellers and trying to get the buyers up as much as possible and then it’s also about helping the sellers to move. If the price is good and it will allow the sellers to do what they need to do then, it’s really about us saying ‘this is the best offer we’ve had. We’ve had a couple of runs at the buyer, this is their best price, we now need to decide whether we’re going to cut them off or make a move.’ How do you keep your vendors happy and in line with the market? It’s a balancing act, not missing the listing by being too realistic or not being overly optimistic and then you’ve got to come back and say, ‘we actually need to realign’. We provide them with the evidence but try not to own the price. Sell the client on the process that we use to get the best price out of the marketplace. By day 30 we’re going to have a good indication as to what the market’s prepared to pay. How are you prospecting and continuing to drive business? It’s about attracting the sellers who want to sell. We promote community efforts that we’re doing so we are branding ourselves as part of the community. Our “slow down, kids around” wheelie bin stickers send a good message and it’s also incredible branding. We pay $2 per sticker, give it to a local resident and it’s out there once a week every week. We also promote all the results we achieve and are selective about what you put on your marketing as well. If it took longer to sell but you achieved a good price then you promote the price. If it was a quick sale but average price, then you promote the timeframe you sold it in. What’s your advice for agents who are struggling to clear their stock? Grade the stock – hot, warm and cold. Work out what will sell, or who you need to tell to come off the market. Until you’ve got a certain level of experience in your career, it can be hard to tell someone that you don’t want to sell for them. Sometimes if you’ve done everything you can and you haven’t achieved a result, it’s often worth having that conversation with the seller and saying, ‘Why don’t you guys have a break? Maybe we revisit it again in six months or maybe you try another agent. Here’s someone I can recommend’. Clients will be quite happy when they have that conversation with you because they’re almost waiting for you to have it with them. You need to help certain clients make the decision that now is not the time to sell; having tough conversations with vendors so that they price themselves to a position where they can sell before the market drops out from under them. [siteloft_button text="CHECK OUT THE ELITE AGENT ARTICLE HERE" link="https://eliteagent.com/take-back-the-market-michael-coulson/" target="_blank" ]
February - April 2019 Suburb Snapshot
So welcome to the new format Purple Property Report - we hope you like it! We’ve tried to make it as easy to understand as possible and cover all bases in terms of a snapshot of property info you would want to have. We’re still in the BETA stage though so we’d love any feedback you may have on additional info or other suburbs within the area you’d like to know more about! How is the Market? The age old question - While we are hearing on the media and from the industry that it is a slow market, tough market, buyers market etc etc...We consider ourselves to be in a NEW market. Buyers and Sellers have never been more informed. There has never been a time when so much information is available at your fingertips. But all this information can actually make it harder to understand. What. Is. Going. On! Unfortunately with all the conflicting information out there as to whether it’s going up, down or sideways we’ve seen buyers miss out on the home of their dreams because they weren’t prepared to pay a fair price (we call this “it’s a buyers market” syndrome) but we’ve also had sellers miss out on the right price, because it came too early or they weren’t quite ready to accept the right price. We have seen some properties take longer to sell, but we have also seen properties achieve record prices in 1 to 3 weeks - in this New market. So how do you buy or sell in the New Market? The simple answer is, nothing has changed. Buyers: Research the market, get your finance ready to go and know what you want in a property. When the right property comes along, be prepared to pay for it - you won’t regret the extra $10,000 you paid to secure your dream home in 10 years time. We are still working with buyers that missed their dream home to another buyer and haven’t found the right property since. Sellers: The game is the same. Understand what realistic market value is before you head to the market. Prepare your property for sale. It’s often the last 1% of jobs on the list that truly make a property standout! Ensure your agent has the right strategy and marketing plan prepared to ensure that no stone is left unturned when it comes to finding the right buyer for your home! And that’s it! If you’d like more information on how to buy or sell well, feel free to drop us a line. And to the landlords out there. We are indeed starting to see some increased activity in the rental market out there, vacancy levels are down and properties are leasing faster so if you’d like more info on property management - let’s chat!